Gordhan ‘shocked and disappointed’ at criticism over SAA’s R10.5bn allocation

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The minister on Thursday said he was shocked by what he called ‘the lack of financial literacy and understanding of government processes’.

Pravin Gordhan. Picture: Abigail Javier/EWN

JOHANNESBURG – Public Enterprises Minister Pravin Gordhan has reacted to widespread criticism from political parties and taxpayers over government’s decision to pump another R10.5 billion into South African Airways (SAA).

Gordhan on Thursday said he was shocked by what he called “the lack of financial literacy and understanding of government processes”.

“The minister is shocked and disappointed with the Democratic Alliance (DA), other parties and some analysts’ lack of insight, financial literacy, and understanding of governance processes. Worse, the DA ignores the suffering of SAA employees and the threat of losing their jobs,” said the spokesperson for the Department of Public Enterprises (DPE), Sam Mkokeli, in a statement.

He added: “In order to hide their knowledge of the aviation sector and its economics, the DA and their partners manipulate facts to fabricate false ideas about SAA.”

The DPE said this money was needed to conclude the business rescue plan, and without this taxpayer obligation, it would cost almost double to liquidate the airline at a cost of R18.5 billion.

READ: SAA funding the fulfillment of an obligation as SAA’s shareholder, says Mboweni

The money will be taken from national, provincial, and local government.

“The Ministry believes that the completion of the business rescue process is the only viable alternative to a viable and sustainable national carrier – one which supports job preservation and the ability to bring the airline back from the brink to a position where employees, suppliers, and business partners can continue to contribute to the South African economy and its integration into the global economy,” Mkokeli said.

In a three-page document, the DPE outlines why this money is needed to conclude the business rescue plan for SAA.

Gordhan believed finalising the plan was the only option. But many are not in favour of this decision like the CEO of the Organisation Undoing Tax Abuse (Outa), Wayne Duvenage, who said this money could have been used to help citizens somewhere else.

“Outa is extremely concerned about the allocation of R10.5 billion to implement what we believe is an unworkable business rescue plan at SAA and believes it is extremely irresponsible. We understand that debts need to be settled, but we cannot watch more precious tax revenue being wasted to revive a dying entity,” Duvenage said in a statement.

“South Africans do have a voice, and as we united against e-tolls, we now call on South Africans to boycott the state-controlled airline.”

Unions representing SAA staff had, however, defended this payout asking taxpayers for another chance.

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